Judge Clears The Way For GM

It looks like the darkest days may be over for auto giant General Motors (GM). The company is now in bankruptcy court, but a judge has just cleared the way for a quick exit. Some personal injury claimants (pursuing a product liability claim against Chevy's Malibu) were trying to delay the sale of the most profitable parts of GM. The judge has refused to do that.

Now GM can go ahead and sell those "profitable" parts of itself to a "new" smaller version of GM. This smaller GM will be 60% owned by the U.S. government, 12% owned by the Canadian government and 17.5% owned by the United Auto Workers union. The rest (about 10.5%) will be owned by GM bondholders.

With about 72% of the company being owned by the governments of the United States and Canada, it would be pretty accurate to call the new company Government Motors. At least they won't have to change their acronym -- GM.

I'm not crazy about the government owning a majority of GM. It was very expensive ($60 billion), and we have no assurance the government will do any better job than the greedy bastards who used to run the company. My only consolation is that executives probably won't be receiving huge bonuses while laying off workers.

In addition to being government-owned, the new GM is supposed to be smaller and more profitable, with a smaller workforce and smaller debt. As much as I don't like this, it was probably better than the alternative -- GM going belly-up. Our economy has already lost too many jobs, and GM going out-of-business would have been devestating.

I just hope the new GM will be profitable, and that someday soon the government can sell its part and get all our money back -- including a nice profit for taxpayers.

China Doesn't Want The Hummer !

As most Americans know, General Motors (GM) has been having a bit of trouble. In fact, if it wasn't for a government bailout, they would have already gone belly-up. One of the things GM is doing to save the company is to sell off or discontinue some of their car lines. Pontiac has been discontinued, and Saturn has been sold.

GM thought they had another of their product divisions sold -- Hummer. A Chinese company, Sichuan Tengzhong, had bid on the Hummer franchise and it seemed as though the deal would go through. But everyone may have assumed too much too soon. While the Chinese company wants to buy Hummer, it looks like the Chinese government doesn't like the deal.

Chinese state radio is broadcasting that the Chinese government will not allow the deal to go through (and they have the final say in the matter). State radio is saying there are two reasons why the deal will not be approved.

First, Sichuan Tengzhong is a construction equipment maker, and has no expertise in automobile manufacturing. The second reason is the environmental impact. A Hummer gets 15 miles to a gallon or less. This is not in line with the desire of the Chinese government to cut pollution from all manufacturers.

The company responded to the radio broadcast by saying, "The fact that it is from an article from a state media organisation does not mean it is government policy." I think they know they are wrong about that. Government radio is not known for its speculating. The company probably hopes they can change some minds before the government makes an official ruling.

Looks like GM better start looking for another buyer for Hummer, although that may be easier said than done. Gas hogs like the Hummer have no place in the future of transportation.

Chrysler Unions Not As Compliant As GM's

A couple of weeks ago the United Auto Worker's (UAW) union members working for General Motors (GM) OK'd a new contract. That contract allowed GM to dump it's responsibility for retiree benefits onto the union, allowed it to close several plants and reduced wages for some non-skilled workers.

At the time, I was mystified as to why the union members approved such a poor contract. Evidently, many Chrysler workers don't understand that either. Seeing the GM workers fall into line so easily, Chrysler tried to pass off the same kind of contract on its workers. They got the national UAW office to agree, but the workers aren't going along so easily this time.

So far, only the local in Kenosha (Wisconsin) has approved the contract. Five other locals have rejected the contract -- Detroit (Michigan), St. Louis (Missouri), Newark (Delaware), Fenton (Missouri) and Twinsburg (Ohio). A majority of the Chrysler workers nationwide must approve the contract for it to take effect. Otherwise, negotiations must continue.

Many locals have not yet reported, and the contract could yet be approved. But it certainly looks right now as if it will probably be defeated. It doesn't look like these workers want the same contract GM workers agreed to.

If negotiations are to continue, it might be good for Chrysler's workers to demand new union negotiators. They agreed to a bad contract with GM, and have recommended the same bad contract to Chrysler's workers.

Is GM Serious About Electric Cars ?

General Motors is once again telling us there going to give America an electric car. At the Detroit Auto Show last January, GM unveiled their latest attempt at an electric car -- the Volt.

According to GM officials, the Volt can go up to 40 city miles on a single charge. Then a one liter three-cylinder gas-powered moter kicks in to recharge the batteries as it is driven, giving the car a range of about 640 miles. The batteries can be recharged by plugging them in to a home electrical outlet.

I have to wonder, if this car can already do all this, why isn't it already on the market? This sounds like it would be a great alternative to today's gas-hogs.

Tuesday, GM awarded contracts to two companies to test and improve the car's lithium-ion batteries. Considering GM's history with electric cars, this looks like a delaying tactic. Do they really want an electric car? Or are they just trying to look like they're doing something to stave off stricter government mpg laws.

In the early 90's, it looked like California was going to force car companies to make at least a portion of their sales cars with zero emissions. GM quickly put out the EV-1, and leased it to California motorists (they would not allow anyone to buy one). The EV-1 electric car turned out to be very popular with those lucky enough to lease one.

But as soon as California dropped its plans to initiate the zero emission law, GM stopped producing the vehicles. Then they recalled all the electric cars and destroyed them. Turns out the car was just a ploy to defeat the California law. GM wasn't serious about producing electric cars.

Now, as gas prices rise and people get upset, GM is again teasing us with visions of an electric car. If they were serious, they would put one up for sale. The technology already exists to produce an electric car that has a range of 200-300 miles.

But they're not serious. Don't expect to see the Volt at your GM dealer anytime soon. They're just trying to keep the federal government from forcing them to make their cars more efficient.